Recital 4

(4)Pursuant to Article 32a(1), point (a), of Regulation (EU) No 600/2014, the competent authority is to demonstrate that a financial counterparty within its jurisdiction regularly acts as a market maker, within the meaning of Article 4(1), point (7), of Directive 2014/65/EU of the European Parliament and of the Council ⁴ , in an OTC derivative subject to the derivative trading obligation. To that end, the AMF and BaFin provided written evidence confirming that the requesting financial counterparties are members of certain EU MTFs and of certain US swap execution facilities (SEFs) recognised as equivalent under Article 28 of Regulation (EU) No 600/2014, and that they provide quotes in response to clients’ requests for quotes (RFQs) for derivatives subject to the derivative trading obligation. The AMF and BaFin also provided data on the trading activity of the requesting financial counterparties on certain EU MTFs and on certain US SEFs recognised as equivalent under Article 28 of Regulation (EU) No 600/2014 indicating that, in the years 2021 to 2024, they regularly received RFQs for derivatives subject to the derivative trading obligation and regularly executed transactions against their proprietary capital in those instruments on the basis of the quotes that they provided in response to clients’ RFQs. After having reviewed the evidence presented by the AMF and BaFin, the Commission concluded that the AMF and BaFin demonstrated that the requesting financial counterparties within their jurisdiction hold themselves out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling OTC derivatives subject to the derivative trading obligation against their proprietary capital at prices defined by them and, therefore, regularly act as market makers in an OTC derivative subject to the derivative trading obligation.